Opinion: The ‘housing crisis’ – what’s real and what’s not

Colorado’s “housing crisis” has been a rallying cry for more and more development over the last few years. But looking at the reality yields a much more nuanced picture.

I finally found the underlying document produced by the state’s Department of Local Affairs (DOLA), where the “housing crisis” was discussed in detail. Published in September 2025, it’s called “Colorado’s Housing Shortfall: An Estimate and Review of Existing Studies.” There’s no direct link, but it can be found at “Colorado’s Housing Shortfall 9/2/25,” and then downloaded per the link at the bottom of this article. It’s worth the look, in my opinion.

It points out that there has been a definite increase in the cost of housing, and argues that this is due to a “shortfall” in construction rates, elevated interest rates and rising construction costs. Interesting, what’s ignored is the almost total lack of regulatory efforts to control prices, as well as the obvious constraints on water, road capacity, open space, neighborhood quality of life, etc. This implies, to me, that most governing entities think that the only issue is supply versus demand, and that somehow increasing supply enough will bring prices down to where they are affordable to all who want to move to Colorado, and that we can support indefinite growth.

In my opinion, this wishful thinking comes from some fundamental misunderstandings. Developers are not in the business of making housing affordable; they are in the business of maximizing profits. So, when the supply increases enough to push prices or rents down significantly, they will reduce production and/or move to another market. This also affects what gets built, of course. Larger units generally yield higher profit margins.

DOLA asserted that, as of 2023, Colorado needed 106,000 housing units to “overcome the housing shortfall” and 34,100 units need to be built annually to “maintain the housing shortage where it was in 2023.” They claim that this would bring the housing market into “balance,” or a “state of equilibrium.” Apparently, their aim is to keep prices tolerable by overbuilding the market, while ignoring all the other impacts.

A quick look at these numbers is scary. At an estimate of 2.5 persons per unit, the 106,000-unit “shortfall” equals 265,000 new people; that’s a new medium-sized city’s worth. Since something like 85% of Coloradoans live in the Front Range, if focused here (which is where most of the demand is), that would be over a 5% population increase. The 34,100 additional units per year add almost a third more again each year — another new city every two to three years. Think about our shrinking water supply, increasing traffic congestion, degrading air quality, and overcrowding of neighborhoods, natural and recreational areas.

The larger problem with “build, build, build” is the size of the market. As I’ve pointed out before, survey results published in Forbes indicate that the Denver area is Americans’ #1 fantasy, with 17% of survey respondents interested in moving to the Denver area, given the opportunity. Even if only a tenth of them could actually do this, it would about double our population. That would mean DOLA’s huge target growth rates would proceed into the indefinite future. Is this really what we want?

Also, it’s worth noting that the over-pricing is having its effect. Growth rates have shrunk considerably.

That’s why, to me, the actions of the governor and the Legislature to maximize neighborhood densification are way off base. They act like somehow upping the density of these areas by some fraction is going to solve things. But it won’t. By the way, according to reports, Boulder’s allowing single-family neighborhood densification in transit corridors already flopped; no one is doing it.

This is no surprise, since all densification will do is destroy the quality of life that people already here spent their hard-earned money to buy into. The actions of the citizens of Lakewood and other metro-area cities to push back on densification are entirely appropriate.

Our political leaders need to recognize these realities and act accordingly. Rather than trying to force overbuilding to push prices down, they should first recognize our legitimate limits to growth. Then, within those limits, require residential developers to make a significant percentage of their units permanently affordable. And require job developments to pay for enough affordable housing so that the lower wage workers can afford to live in proximity to where they work. These approaches minimize the negative impacts of too many people while producing housing that is affordable, not just what the developers want to build to maximize their profits.